Crypto's 10/10 Scare: Did Traders Really Cut Leverage?

Instead of reducing risk, crypto traders had actually increased their borrowed positions heading into the 10/10 anniversary. That left them vulnerable as Bitcoin (BTC) dropped toward $80,000, triggering over $1 billion in forced liquidations.

A tariff threat from President Donald Trump on October 10, 2025, triggered more than $19 billion in forced closures—a record. This week, some traders claimed that fear of a repeat had led the market to slash risk.

“The bear market PTSD is so strong that people actually deleveraged for an anniversary to a liquidation event. Think how deep that PTSD goes if you’re doing that. I’m telling you, there is mass under exposure and things actually look good,” said Eric Conner, a crypto veteran and one of the co-authors of EIP-1559.

But did they really?

Borrowed Bets Rose Into Bitcoin’s Drop

Leverage involves trading with borrowed funds. If prices move adversely, exchanges automatically close the position, a process known as liquidation.

The peak landed on the day of the selloff. Bitcoin fell to $80,393, with over $1 billion liquidated in 24 hours, as BeInCrypto reported. Roughly $930 million of that came from long positions.

BeInCrypto had warned of the risk a day earlier. Its 10/10 repeat analysis found that the market’s leverage relative to its size was nearly as high as before last year’s crash.

CryptoQuant’s Estimated Leverage Ratio compares open positions to Bitcoin held on exchanges. A higher reading indicates more borrowing. It rose from about 0.234 on October 3 to roughly 0.256 on October 8.

The ratio has since eased only to about 0.250, still above where it started the week.

However, total open positions fell from about $154 billion to roughly $142 billion, according to CoinGlass data.

Funding Costs Fall Far Below 2025 as the Fear Gauge Holds at Greed

Funding rates are fees paid by traders betting on price increases to those betting on declines. High fees indicate a crowded bullish side.

Deribit’s Bitcoin funding rate stood near 7.1% annualized this week, compared with 26.9% before the 2025 crash. On OKX, funding averaged about 3.5% over the past seven days, exchange data shows.

Alternative.me’s Fear and Greed Index gauges sentiment from zero to 100. It read 64, or “greed,” on Saturday and dipped only to 59 during the Friday selloff.

Bitcoin trades at $82,699, up 0.14% in 24 hours, according to BeInCrypto data. That leaves it about 35% below its October 2025 record near $126,000. Glassnode data places the next cluster of leveraged bets near $75,000.